Trace circuitry, and a method of operating such trace circuitry, are provided for generating a trace stream indicative of activities of monitored circuitry of a data processing apparatus. The monitored circuitry produces data elements indicative of those activities, and the trace circuitry comprises trace element generation circuitry which is responsive to at least some of the data elements produced by the monitored circuitry to generate trace elements representative of those data-elements, with the trace elements generated being dependent on a selected trace mode of operation of the trace circuitry. Compression circuitry is then arranged to apply an encoding operation to a sequence of trace elements in order to produce a packet whose bit pattern represents the sequence of trace elements, and to cause that packet to be output in the trace stream, the encoding operation applied being dependent on a current compression scheme associated with the compression circuitry. Whilst in the selected trace mode of operation, the compression circuitry is responsive to a compression change stimulus to change the current compression scheme from a first compression scheme to a second compression scheme whose bit pattern encoding space overlaps the bit pattern encoding space of the first compression scheme, such that following the change of compression scheme any further packets produced whilst in the selected trace mode of operation are produced in accordance with the second compression scheme. Such an approach has been found to provide improved compression efficiency thereby reducing the volume of trace data produced.